New businesses bring new hope to poverty areas
Print Edition
Tan Wansheng, 69, feels lucky to be able to support himself, while many of China’s elderly rural residents are normally financially dependent on their children.
Tan, from Chaling County in central Hunan Province, earned 4,000 yuan (US$630) last year from growing oranges for Vingoo, a domestic brand of vending machines that offer fresh-squeezed orange juice in 176 Chinese cities.
An officially recognized impoverished county, Chaling faced grave challenges in increasing villagers’ income, but its cooperation with Vingoo since early 2017 has opened up new possibilities. “Villagers love the project,” Tan said.
The project, which earns each grower 7,000 yuan a year on average, has lifted 300 families out of poverty in the county, said Zhou Qi, founder of Shanghai Geant Investment Company, which owns Vingoo. “It is part of our corporate social responsibility.”
The case epitomizes the ever-increasing role of private enterprises in poverty alleviation by virtue of their advantages in emerging industries, such as “new retail” and e-commerce.
Following 40 years of reform and opening up, China has 27 million private enterprises, which contribute more than 60 percent of the country’s GDP growth and create more than 80 percent of jobs.
Private enterprises are good at designing and implementing targeted projects for poverty reduction and making best use of their limited resources, according to a report on the performance of Chinese enterprises in poverty alleviation published in July.
Private entrepreneurs are sensitive about the market, said Tu Jianhua, chairman of the industry and commerce federation in southwest China’s Chongqing City. “They bring market-based methods and ideas to the countryside, and better adapt to small rural businesses.”
Engagement in poverty relief facilitates branding, and also results in economic returns due to lower labor costs and resource prices in rural areas, said Zuo Jianming, senior analyst with Orient Securities.
Vingoo sells 4 million cups of orange juice per month through terminals at shopping malls, airports and metro stations. After scanning a QR code on the machine, the customer watches the oranges be peeled, squeezed, and the juice delivered just in a minute. Chaling oranges are exceptionally sweet, but many local residents were unaware of their value, Zhou said.
Under an agreement with the local government, the company offers training on orange growing and local financial institutions provide farmers with preferential loans to start their businesses.As a result, the yield has more than doubled, Zhou said.
The county is ready for a final examination by state poverty alleviation authorities before being removed from the country’s list of poor counties.
Renowned Chinese economist Li Yining is positive about the potential of private enterprises in fighting poverty, believing they better understand the market. “For example, you cannot only know how to grow vegetables, but also must know where they should go. Private enterprises are better at such market behavior,” Li said.
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